The Sopranos television series obviously generated a lot of revenue, and as you might imagine "Tony Soprano" James Gandolfini left behind a considerable estate. At the time of his passing his net worth was estimated to be approximately $70 million.
The accumulation of wealth can result in a great deal of estate tax liability if you don't take the correct steps to position your assets with wealth preservation in mind.
Apparently the actor did not plan ahead very effectively. He did have an estate plan in place, but most of his wealth is being transferred under the terms of a last will. Simply creating a simple will to direct the transfer of assets is not going to do anything to provide you with estate tax efficiency.
On the federal level the estate tax carries a 40% maximum rate, and the current exclusion is $5.25 million. Gandolfini resided in New York, so his family faces yet another layer of taxation because there is a state-level inheritance tax in the state of New York.
The New York state inheritance tax exclusion is $1 million, and the maximum rate of the tax is 16%.
When you combine the rates on both the federal and the state level you are looking at total taxation that consumes more than half of the taxable portion of an individual's estate.
In the case of James Gandolfini it is estimated that his heirs will receive only $40 million out of the $70 million that he left behind after estate taxes have been paid. With proper planning, there is a good possibility that the entire estate tax liability could have been avoided. Unfortunately, most of us rationalize our procrastination until we have a "wake up call" such as a personal medical event or the death of a loved one. Gandolfini was not elderly and had little forewarning, so he likely thought he had time to consider his estate planning. Perhaps, his untimely death and the tremendous costs associated with it will be the wake-up call more of us need to meet with qualified counsel and complete our estate planning before the unfortunate event occurs.